As of January 1, the payrolls of workers, both employed and self-employed, will undergo a change, which will have a negative impact on the amount that employees will receive at the end of the month. This is due to the planned increase in the Intergenerational Equity Mechanism (MEI), an additional contribution that was approved in December 2021 after negotiation between the unions and the Government, and which came into force in early 2023.
This measure has the objective of balancing and reinforcing the pension system in the face of the increase in expenses derived from the retirement of those born between the end of the fifties and the end of the seventies. Therefore, it is a finalist contribution that seeks to fund the Social Security Reserve Fund.
In fact, since it came into force in January 2023, it is expected that around 50 billion euros will be collected in the next 10 years, which will increase the pension pot.
How much will the MEI increase in 2024?
In 2023 the MEI was established at 0.6%, of this percentage 0.5% had to be paid by the company and 0.1% by the worker. As of January 1, this figure will rise to 0.7% and in this case the amount will be divided into 0.12% for the employee and 0.58% for the employer. So that 0.1% on the payroll of each worker during 2024, depending on the salary, will be between about 48 or 428 euros per year.
This percentage will increase until December 31, 2050 according to the following scale:
– In 2024, 0.7% will be paid (0.58% for the company and 0.12 for the worker).
– In 2025, it will be 0.8% (0.67% paid by the company and 0.13% paid by the worker).
– In 2026, it will be 0.9% (0.75% is paid by the company and 0.15% by the worker).
– In 2027, it will be 1% (0.83% for the company and 0.17% for the worker).
– In 2028, it will be 1.1% (0.92% paid by the company and 0.18% paid by the worker).
– In 2029, it will be 1.2% (1% paid by the company and 0.2% paid by the worker).
– From 2030 and 2050, the same percentage of 1.2% will be maintained, with equal distribution between employer and worker.
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